As part of its larger disposition/restructuring strategy, Capital Senior Living Corporation announced in its third quarter earnings report that it sold two non-core independent living communities in Peoria, Illinois and Springfield, Missouri, generating some healthy proceeds in the process. The communities sold for a combined $64.75 million, or nearly $205,000 per unit, resulting in $14.8 million of net cash proceeds and $44.4 million of mortgage debt off its books. Tim Cobb and Sabel Kaminski of Berkadia represented CSL in the transaction.
Both built in the late-1990s and totaling around 215 units, these communities were both over 90% occupied, but rent growth was sluggish. They were in need of some capex, which will be the job of the new owner, alternative investment management firm Inland Private Capital Corporation, which is making its first seniors housing acquisition. Bringing in Dial Communities to manage the properties, Inland will invest in some significant capital improvements in an effort to improve cash flow. They paid all cash in a DST structure for this deal.
Inland’s ambitions in the senior living market seem pretty big. The company also announced a strategic relationship with Spectrum Retirement Communities to acquire, own and manage a portfolio of communities across the country. We’ll have to wait and see just how big they plan to get.